Now that Nintendo’s got the announcement of financial losses out of the way, it can look ahead to plans for the coming year. As expected, follow-up statements to investors revealed some interesting insights into the company’s plans, with the biggest news that Nintendo's 3DS retail games will be available to download later this year, with Wii U games hitting both digital and retail from day one. It'll all kick off with a little game called New Super Mario Bros. 2 in August, as it’ll be available both as a physical boxed release and as a direct download.

We knew this was coming, with Satoru Iwata previously stating that Nintendo was planning to ‘go digital’, but it’s nevertheless big news now that it’s actually confirmed. The devil is in the detail, however, so let’s have a look at what was said, and how the digital sales will work.

3DS paves the way

The arrival of the first digital retail release from Nintendo is only three to four months away, which reinforces Iwata’s assertion that the foundation and infrastructure on 3DS is practically ready. We knew when Nintendo unveiled the newly branded Nintendo Network that it was planning to improve its online strategies. These improvements were needed, undoubtedly, as DSi and particularly Wii lagged far behind their rivals in online connectivity.

To give credit where it’s due, 3DS has been a beacon of online progress, despite a launch period where it looked like more of the same. Improved Friends List functionality, Nintendo Letter Box (aka Swapnote) as well as major 2012 releases such as Resident Evil Revelations and Kid Icarus: Uprising including substantial online multiplayer modes. Then, of course, there’s the eShop.

Another 3DS title with online multiplayer

After a slow start, the eShop is building a solid library of excellent 3DS-exclusive titles, while also including demo downloads and game trailers, with the front-end getting a makeover this week. Subtle updates, such as the option to redeem download codes, no doubt provide the infrastructure to which Iwata was referring. Another significant sign of progress is the connection rate of 3DS users on the platform; apparently as much as 70% of users in Japan and North America have connected, a major improvement compared to Wii and DSi. More and more 3DS systems are going online, with consumers clearly being attracted, gradually, to the idea of downloading new games. The time for retail downloads seems ripe.

Before we hail the arrival of the digital age on 3DS, however, there are two areas that may detract from the appeal of owning Mario’s latest as a digital file, rather than a traditional game card. The first issue may be the price for a direct purchase from the eShop — Iwata had this to say about pricing:

In terms of the fact that the company is offering the value of the software itself, we do not have an idea to act on such a belief as, “digital download software should be sold at a cheaper price point than the packaged software counterpart.”

Consumers have every right to ask why a digital download could cost as much as its retail equivalent, as shipping and manufacturing costs, to name two areas, will be non-existent. There will undoubtedly be a price to pay for servers to host the files, for example, but it’s surely less than moving physical products. This move is likely to be focused on keeping retailers happy, which we’ll come to soon.

Download games could boost retail stores

The second downside to the proposed download model is the apparent confirmation that each purchase will be limited to one device only. A downloaded game will be kept on an SD card, just like 3DS software from the eShop right now, but like those downloads the game will be locked to one 3DS system. Nintendo consoles are, arguably more so than any of its rivals, family machines that sometimes lead to multiple systems in one household. To take Super Mario 3D Land as an example, one cart with three save profiles may be shared by siblings, or parents and their children on two or more 3DS consoles. If a download of New Super Mario Bros. 2 is tied to the account on your console, it may only work on that system alone, so the idea of sharing the game with others won’t work in the same way. Though some may say that it’s a choice to make when considering physical or download purchases, it’s a turn-off for some that undermines the idea of digital retail titles.

While those are concerns to consider, for some the idea of retail downloads is appealing and long overdue. The fact that these titles will be stored on standard SD cards is a boon for 3DS, as this memory is available for low prices in comparison to the infamous proprietary format on Vita. Nintendo also seems to be catering for a wide range of gamers with confirmation that retailers will be in a position to sell its download titles as redeemable codes. This will be a boost to retailers having difficulty maintaining physical stock – as was the case with UK retailer GAME in recent months – while a lower wholesale rate may also mean that stores pass the saving onto gamers. Availability in stores will also suit those who prefer to pay cash rather than use a credit card online, while the very real possibility for a lower price will appeal to everyone.

Wii U and beyond

Online to play a big part on Wii U

The news that Nintendo is going to introduce downloadable retail titles isn’t surprising: it’s a move that is essential to keep Nintendo competitive with its rivals, and for the company to ensure that no potential sale is lost. The more ways we can buy games, without worrying about whether retailers will have stock, for example, the more we’re likely to buy. The easier it is, the more appealing.

The structure outlined so far certainly has its positives and negatives, but that’s inevitable as Nintendo tries to keep retailers happy and avoid digital buyers abusing the system. Whatever we think of the setup, the launch in August will allow Nintendo to monitor progress and deal with issues before Wii U arrives towards the end of the year, ensuring that its next-gen console has minimal growing pains. We already know that Wii U will launch with a digital store, and with retail downloads included it could be an ideal start in the mission to get the consoles connected. 3DS is evidence that with some effort, despite a disappointing reported 50% connection rate in Europe, Nintendo can persuade its users to sample online delights, as well as good old-fashioned game cards.

So, does Nintendo ‘get’ digital, based on what we know so far? We have to say yes and no: the prospect of the biggest titles being a stylus tap away is enticing, as is the idea of walking into a shop and buying a download code at, potentially, a reduced price. There are still concerns, however, that the direct eShop option will feel expensive, and that a one system limit is draconian. It's a tough balance for Nintendo, but for the first time we can at least be pleased that it’s going to try and join the download age of gaming.

What do you think? Will you be opting for retail downloads, or sticking to physical game cards and discs? Let us know in the comments below.

This is exactly why the 3DS needs to have individual accounts instead of games being tied to the system. Hopefully Nintendo will have an update ditching friend codes in favor of accounts for the 3DS by the end of the year. We already know the Wii U will have them so that's good. For the physical vs. digital, I'm still sticking with physical game cards/discs.

That was a nice read! I'am really curious about how Nintendo will support the WiiU and 3DS in the future, connectivity wise. The 3DS already is a major step forward, but it still has a lot of catching up to do. Nintendo doesn't have to go in the same direction as Microsoft, but I would like to see more online (multiplayer) functions like cross game (voice) chat, the ability to send game/friend invites and of course: more online multiplayer games! It would be awesome to play NSMB2 online with a friend, while yelling at each other with voice chat!

They keep making steps in the right direction which is nice to see.I'm not too fussed with it all myself, as long as games don't go completely digital as I like having my collection sitting on the shelf next to me.

I will add though, that Nintendo of Australia don't seem to 'get' digital, as the eShop here hasn't had an update at all this week! D:Not sure if I want to get Block Factory or not, but if I do then I'll have to change my region first.Any idea what's going on there?

If Nintendo can introduce and properly handle sales and price drops, then I'd say they really know what they're doing with online. If they're just gonna leave the prices stagnant like they do with Wiiware, I can't imagine too many people would bother paying for Digital copies when they can get cheaper retail versions.

I'm sticking to my physical media until Nintendo gives us bigger SD cards update on 3DS. If they get how digital works all I can say is we have to wait and see because all we have right now are promises I want to see how well they impement this. Not only that they're barely getting started with their online infrastructure let's not forget Sony and Microsoft have been doing this for years so Nintendo has a bit longer to go before it can catch up. I'm just gonna wish them the best of luck and hope they do an amazing job.

here's my prediction: nintendo will start with the digital, it will be so-so. people will post how we all have to be patient. nintendo will upgrade a step at a time. people will post how we all have to be patient. nintendo will give us some of their reasons for doing things their own way. people will post how we all have to be patient.

i have my doubts that ninty, as much as i love them, will ever really 'get' the internet/anything digital.

@MartynI know but 32 Gigs is not that big at least not for retail games. Nintendo said that in the beginning devs will have access to 2 gigs of data but eventually they'll have access to 8 gigs and if that's true 32 gigs is not that big. I just hope Nintendo updates the 3DS so we can use even bigger SD cards.

In my opinion, Nintendo will never understand digital distribution until they move to an account-based system rather than locking games to a single console. Also, they will need to look at pricing.

From the viewpoint of the consumer, the big advantage digital distribution has is convenience. It's easy to buy games and they don't take up storage space.

Now, a lot of that convenience is lost if games are locked to a single system. That doesn't happen with cartridges. Purchasing issues aside, if Nintendo wants to charge the same amount for retail and digital games, they need to make them as attractive as each other. Digital games are arguably 'worse' due to being locked to a single system, and that is a disincentive to buy them.

If you talk to people about services like Steam, they are willing to trade physical packaging for a cheaper price and extra convenience. I don't see that equation holding with the current state of Nintendo's distribution. If I can get the same game as a digital or retail copy for exactly the same price, I'm going to go retail every time if the issues mentioned above are still present.

Though I agree that many Nintendo fans share games, and Nintendo's restricting of digital games to one system will block that, I still agree with Nintendo. It's a fact that PS3 owners often share accounts just to download each other's games. Sometimes these people don't even know each other. They just find someone who has games they want, and vice versa, and trade information. I've even heard of people selling their account information, putting the price of their account lower than that of the games they've purchased. This practice can be likened to legal piracy, and I understand why Nintendo doesn't want to deal with it.

That said, what I really want to see is linked accounts between consoles and portables. I have a lot of VC games on the Wii I would love to play on my 3DS.

@TrueWiiMaster: Plenty of people share their physical copies of games, and have done since video games were a thing. Sure, I can understand game companies wanting to curtail the practice, but it's a huge cost to convenience from the point of view of the consumer.

Sharing account details is risky and, although I can't prove it, I'd imagine the people who do are by far the minority. I don't think that account-based digital distribution in any way exacerbates the problem. If anything I think it would enhance sales, as people can no longer trade in used games or rent games.

(Although I have to admit that not being able to buy/sell used games would be seen by many as a huge inconvenience. Hmm.)

"There are still concerns, however, that the direct eShop option will feel expensive, and that a one system limit is draconian."

The download games need to be cheaper than retail copies, by quite a large margin imo, and ideally it would be great if there was some way to possibly play them on another 3DS or Wii U system if we so choose.

I really want to go all digital. Christ, I've been dreaming of that for years. There's so many advantages and very few disadvantages when it's done right. It has to be done right however.

On the surface Nintendo seems to be trying to give us what we want but looking deeper it doesn't seem to want to give us what we really want.

@Wheels2050I didn't mean Nintendo was trying to stop game sharing (though they will for all digital games with this policy). I meant they would stop people from giving each other digital copies of games by sharing account information. For example, my friend linked his account with another friend's PS3. The second friend can download and play every game the first friend purchases from PSN. This is a common practice, and not an entirely ethical one. It was common enough, at least, for Sony to take action, limiting the number of systems users can link their accounts to from 5 to 2. Nintendo doesn't want the same thing to happen to them.

for downloads to be succesful you have to have the space to download to. Full retail releases will fill up an sd card fast. Thats what is great about the 360 and ps3, onboard internal memory and lots of it. Nintendo doesnt seem to be offering this. SD cards are fine for smaller downloads but not larger ones

Nintendo most definitely does not get it. If Nintendo does not pass on the savings from digital distribution to the consumer and make the prices cheaper then there is absolutely no need for it. Mind boggling. It's also worth mentioning that Sony doesn't get it either (although vita seems to be trying to improve on this). A new retail copy should never be found that is cheaper than the digital alternative. Heck you shouldn't even be able to find a used retail copy that's cheaper than a download that's locked to one console and can't be resold. Give everyone a real legitimate reason to consider going the digital route and watch it flourish.

If the price for the digital version is going to be the same, I don't really see the benefit. A game card can be lent to friends/family, or resold once you're done with the game—plus there's always a psychological benefit to purchasing a tangible object. The only reason I'd buy a digital game over a physical one is price—Nintendo's fooling themselves if they think there's any other legitimate selling point.

Well I'd like to have my 3DS games all on my 3DS to avoid having to change cards - but the downsides (restriction to single system, lots of space taken up, losing one SD card loses all games you own, no chance of selling once finished with it, no physical box/material) mean that I'll only ever consider doing so if buying the game digitally costs at least £8 less.

I personally like physical copies because their is that certain feeling about having a great game with its box art and card/disc. Besides, you can't special goodies such as AR Cards (for example) on a digital copy....

this is a great article and the news nintendo has confirmed is wonderful to hear.I need just 2 more things from Nintendo to change before they really "get" online, and primarily the first one over the second.1. Lose the friend codes. I don't know if its too late to save the 3DS or anything, but Wii U NEEEEEEDS to launch with usernames akin to XBL and PSN. This is the most important thing they need to do to bring Wii U owners online.2. Wiiware & Virtual console purchases from Wii owners should be transferable from a Wii to the Wii U, however, given that there is no account associated with the Wii U home screen, I don't see that necessarily happening. Although every Wii does have a specific serial number, if the serial numbers are in any way associated for each download, perhaps in that way they can create a transfer system.

Remember how Steam was once detested and how people didn't want to play Half-Life 2 because of it? Well, Valve stuck with Steam and kept on making improvements to the service, and look at where it is today. Who's not to say that Nintendo will end up the same way? Nintendo can also look at what Steam can do, and then end up MUCH, MUCH better than before on their online strategy.

Also, if we have personal accounts on the 3DS, we should have the ability to link the Friend Code with Club Nintendo (use that as our account, please, like how Microsoft uses MSN with Xbox Live). THAT will be our account. And when we need to redownload our games... well, they need to take cues from Apple and Steam. Then everything will be fine.

For Wii U I'll be buying physical copies but for 3DS the convenience of having full-retail games on the system itself is very appealing. Laziness will get the better of me, honestly I would play more 3D Land and Star Fox if I weren't too bothered to take Mario Kart 7 out of my 3DS.

but if nintendo does digital i want cheaper because its not physical and many more things,ps if you want a download of some game and theres a retail copy aswell and they have a pre-order offer....how does that work unless they are able to sell download tickets in stores like 3d classics kid icarus

if nintendo made it so that u have an account instead of just downloading on ur current system and it works than ya I would consider it, but until they have a XBLA or PSN style network, no, cause if my system dies...than what?

I hate when physical copies go out of print and then the prices skyrocket. An example is the limited run of Metroid Prime Trilogy. Digital would allow everyone to play the games they want at a reasonable price. If Nintendo allows digital copies playable on more then one system and keeps the prices down, then they have succeed

@dark-insanity u do know that I mean accounts wise, not "ohh hey I downloaded something...there it is system dies ohh look, I gotta buy it again". They don't have a real system to have seperate accounts for people, they just have seperate 3DS' with friend codes. That has to change...

@dark-insanity with PSN, u need a email and a password to be associated with, so the games and everything u bought is on record. I'm saying Nintendo needs to do the same system (or they could simply make people get Club Nintendo accounts and link it that way, that would work) but so far, you can just buy a game and download it without it being really associated to u, it's instead associated with your system (ie. 3DS)

It's a very very solid start, hell I'd call it a done deal on being right in there as they should be except for one damning issue they foolish grasp at. That issue, binding games to your system alone and not going for accounts. If your hardware breaks, if your hardware is stolen, if whatever else happens and you can't just mail it to Nintendo for repairs, kiss your hundreds or thousands of dollars in games goodbye. I can't understand why they'd be that control happy and ignorant about it, let alone why consumers would be alright with it either aside from just not knowing any better.

Until Nintendo goes PSN-like with accounts so that you can have your games on whatever hardware you login to with your info on it, they can forget me and a lot of others probably paying more than $5 or so for any download they offer up. Buying a full retail game is just a death sentence on hold. It could be a month, a year, 5 years down the line, but something can and probably will in time happen, then where's your investment?

I know one thing for sure. If Nintendo doesn't 'get digital' by now, they may as well hang it up like Atari did when Nintendo shoved them out of the way because of slow hardware advancements and progress. You think they'd learn from their own past!

Unless Nintendo makes the price of download retail games significantly cheaper than the hard copies, I'd so no, they're absolutely not getting it. There is absolutely no reason to download a game when you can get the game (physical copy) +packaging, manuals, extras (AR cards and stuff like that) for the same price. Plus if your system breaks, you have to pay 40 more bucks to get it back.

@Oddy I agree that Nintendo is learning how to play the digital game, albeit too slowly. By the time Nintendo gets to PSN-esque downloads, Sony and Microsoft will have something else, something better.

At the same time, it isn't surprising that Nintendo is too slow to catch up to the competition. Nintendo has never been #1 in technical terms, and they probably never will be. Digital downloads are very much a technical field because there is simply no way to mask things that aren't beautiful (graphics) or get around technological imperfections (gameplay > graphics); you need a strong, reliable infrastructure to perform digital downloads. Now that Nintendo has the power to do this, we can only wait and see how Sony and Microsoft will respond.

On the topic of digital vs. physical, I have to say that it depends on what system the game is for. NES and Game Boy games, for example, are prone to save-battery failures, so it isn't a bad thing to have the game on something that will guarantee the safety of your save file (Virtual Console).

For newer games, a good chunk of data is saved to the system anyways. The only thing that's missing is the cartridge itself in digital downloads, which is something that many gamers, including myself, would rather have than not. A few thousand blocks of memory can't compare to a cartridge IMO.

I am going stick with physical copies as long as i can, because there is something cooler having a physical game card and game box. But as sad as it is, sometime in the future physical copies will be history, because making physical copies of games consumes resources such as oil and there is only limited amount of oil in the world.

The system lock is to prevent just sharing around games like you would a CD. If it is account-based, you could just give your account to a friend and he could play it on his system. I'm sure there are limitations to prevent that, but then everyone will just b***ch about that.

Having said that, cheaper prices and retail download codes sound good to me, but leaving the game shop without a box will take some getting used to.

Instead of purely locking a game to one system, they could have a lending function. If the software is lent, it cannot be played again until the borrower returns the game. That way, people can share the same game as if it was a physical copy.

too little, too late, nintendo. no digital distribution is like embracing the stoneage of gaming.many people are still mentally stuck in the stoneage when i look at some posts that are defending cartridges. i would advice some hours at a psychologist. your problem can be treated. you do not have to live like that.(the only thing i would "get" if those cartridge-users would admit that they just got no money for their hobby so they have to sell their games after playing them.. which is not possible with digital distribution. every other argument for cartridges in the year 2012 is pathetic)

@Myx - Prepare for some amazing 'pathetic' arguments then.1) Games can be used on multiple systems - allows for game sharing and MUCH more value.2) Games wont fill up your SD card and system - after which you wont be able to get other games, like eShop titles.3) Games wont all be on one system in case you happen to lose/break it - saves you possibly hundreds in a bad situation.4) Games come with physical add ons like the box, manual (appeals to collectors/fans - why do you think collectors edition copies get sold?) - with extra's like this, why get the digital version if it isnt cheaper?5) Games can be sold later - making up for a lot of the price of purchase.

Arguments against?1) Buying price is cheaper - but WAIT! Nintendo said possibly not. Oh...right...2) No need to change game cards - Is it worth all the disadvantages? This is possibly the most pathetic argument actually. You can now get cases to hold loads of games, and how lazy are you getting if you cant just change a game card..?

Of course digital distribution is the future, and in the future it WILL replace physical copies, but the system Nintendo have here is far from perfect, and right now there are more cons than pros on the matter.

I love love LOVE the option of having digital game downloads. Don't get me wrong, I'll almost always opt for the physical copy but having both choices is a very VERY wise choice and a VERY good one for gamers.

Example:I've been very interested in the Fire Emblem series for quite some time but I was never able to pick up the Fire Emblem games when they came out. Today I decided to really look into getting Fire Emblem Radiant Dawn on Wii. I prefer getting my games new, especially on Nintendo systems because I really enjoy Club Nintendo however because the game came out in 2007 it's extremely hard to find a new NA copy. No local stores that carry games have it new and the only place I could find it new was Amazon for over the original retail price of $50, so I decided to get the 1 used copy in my entire city which was at a gamestop nobody goes to for $40. Luckily it had a case and manual but the disc isn't in the greatest condition.

If the game was still in print or if the game was available through digital means I would of gotten the game New. While I do still prefer to get the game through retail, if it were available digitally and wasn't in print anymore, I would have no problem getting it in the online store. So for me, Nintendo deciding to bring their games to a the digital market makes me a very happy camper.

im not that much interested in digital downloads of full games. i like to borrow games from other people to test out and play and i don't know if it can be done when u can only have a digital dowload on one system. well we shall see how it goes in the upcoming months..

The limit to one system is nothing new from Nintendo's history of demanding control. I hope they change to at least having your account able to back things up. Right now, if your system goes, everything bought on it goes with it.

However there is another boon not mentioned: if Nintendo is going all in on current gen games for download, they may also be ready to beef up the size limits on their "ware" titles

I'll bite when Nintendo adds user accounts which let you redownload games in case your system dies or gets stolen. I can imagine myself buying digital for something like Rhythm Heaven or Animal Crossing. Games like that were made for playing in short bursts always available on the 3DS menu and I feel the physical format actually hindered them. I don't think there are as many benefits buying digital for non-portable consoles though.

Those are the only Nintendo games I'm likely to buy digitally. Most of their titles can be resold close to the price you bought them for and Nintendo packaging/manuals are always nice and full colour. If carts could be bundled with a one-use only code for a digital copy at a reasonable price I'd be all over it. Probably wishful thinking unless some retailers out there are brave enough...

@BenAV: I'm glad we're not letting the slow Australian eshop go unnoticed. Hopefully Nintendo going digital means it'll be less risky and easier to distribute European games that never made it over here in retail like Tales of the Abyss. (I imported it myself but many people I know aren't bothered or don't have the means to import.)

@VintageBoy Yeah, you're right. But Nintendo does make the first of most things. ((3D and wireless controller/involves movement)) If you look at Xbox and Ps3 you can see they wait for Nintendo ideas and then they make it in a different way.

As Geonjaha said, the only possible advantage I can think of for choosing digital is so you have it on your system and don't have to change game cards. If that's a good enough reason for some people then that's cool. I am of the opinion that the digital alternative should always be very significantly cheaper, because it is by far the better deal for publishers when the customer chooses that option.

Digital Distribution is the future.It opens up the market to indie development teams, allows them to set the price point, release patches, demos, DLC, have their games rated accurately.It's the best way to get some fresh blood and new ideas.

How much more does Nintendo need to get? Do the ps360 allow you to think of a physical game and magic pixies will give it to you for free? If so I think Nintendos just making there final adjustments on a real life Navi who can do that

Since i'm the only one in my house who plays video games, i have no problem with the downloaded game only being "locked' onto my 3DS or whatever console i have. I'm fine with the idea of the retail downloads, so i can't complain. Plus, if the download price is cheaper than the retail price, I defintely have no problem. But what i see on the downside is that since Nintendo is so desperate to launch retail downloads, this could mean the end of retail purchases for Nintendo.

I find the idea of all my games on one system very appealing, more so for my 3ds because then I will be able to play all my games on the 3ds without lifting a finger. I also have an excellent idea, your 3ds should be able to suck the cartridges that you all ready own dry of information and keep them on the 3ds. Then you should be able to sell them back to ninty who would use them to put more info on the cartridge.

I like the Idea of buying digital, since I'm from Argentina and physical games are really expensive (e.g. pokemon black USD100). But I rather buy the game from US ebay at "original" price and wait a month to arrive.

I'm not so sure about digital games though, I'll need SD cards, which are expensives too here. And I think physical games are safer than digital.

@Geonjaha what a reasonable reply to what may possibly have been a joke post. I agree that it comes down to a value proposition: is what I receive worth what they want me to pay?A physical good can be lent, resold, returned or exchanged. A digital good generally lacks those privileges. A physical good may offer a collectible value, i.e. Offer the customer a case or artbook that the customer values.On the other hand, a digital good can be immediately acquired from home and exist perpetually on the device (assuming no hw failure!). Does the value proposition balance out to equal (which is what pricing them equally suggests)?I think for most "core" gaming customers the answer is still no.So perhaps retailers will offer their digital games at a lower cost even if Nintendo will not? It seems to be what Nintendo alluded to...can't say for sure, that Iwata guy sure is wordy.